Countdown to government budget cuts

2.25.13 – Four days and count­ing. But who’s count­ing? Pres­i­dent Barack Obama for one.

That’s how long before government-wide bud­get cuts begin to hit home that will slash spend­ing by roughly $85 bil­lion over the next seven months.

And more are on the way if Con­gress and the pres­i­dent can’t fig­ure out how to replace Friday’s indis­crim­i­nate autopi­lot cuts — called a “sequester” in gov­ern­ment jar­gon — with more tar­geted measures.

Obama told the nation’s gov­er­nors on Mon­day, “Unfor­tu­nately, in just four days Con­gress is poised to allow seri­ous and arbi­trary auto­matic bud­get cuts to kick in that will slow our econ­omy, elim­i­nate good jobs and leave a lot of folks who are already pretty thinly stretched scram­bling to fig­ure out what to do.”

The two par­ties remain far apart. Obama insists on both spend­ing cuts and higher tax rev­enue through trim­ming deduc­tions and loop­holes used mostly by the wealthy. Repub­li­cans see that as a tax increase and are balking.

So Democ­rats and Repub­li­cans are hurl­ing accu­sa­tions at each other as Con­gress returns from a nine-day recess and mem­bers begin to focus on the next man­u­fac­tured fis­cal dead­line — March 27, by which time law­mak­ers must pass leg­is­la­tion to keep the entire gov­ern­ment operating.

Obama is paint­ing as gloomy a pic­ture as pos­si­ble of the impend­ing cuts, even though they rep­re­sent a rel­a­tively small per­cent­age of the government’s $3.5 tril­lion budget.

Over the week­end, the White House put out lists of how the cuts would affect indi­vid­ual states.

Every­body hates the sequester — for­mer Fed­eral Reserve Vice Chair­man Alan Blinder jokes “that’s Latin for ‘cut­ting fed­eral spend­ing stu­pidly’” — but nobody’s yet fig­ured how to make it go away.

And, actu­ally, the cuts — together with other deficit-reducing steps by Obama and Con­gress over the past year and a slowly recov­er­ing econ­omy — are con­tribut­ing to an improve­ment in the government’s bud­get picture.

For the first time in four years, the bud­get deficit is on course to sink below $1 trillion.

Posted by Randa Wagner on Feb 25 2013. You can follow any responses to this entry through the RSS Feed. Both comments and pings are currently closed.